Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apple Inc. (AAPL), Southwest Airlines Co (LUV), McGraw Hill Financial Inc (MHFI): Egerton Capital’s Top Stock Picks

Page 1 of 2

Egerton Capital Limited, led by John Armitage, recently filed its 13F with the U.S. Securities and Exchange Commission for the reporting period of March 31, disclosing a public equity portfolio valued at $7.30 billion. London-based Egerton Capital was founded by John Armitage and William Bollinger in 1994. The fund’s strategies are equity long/short and equity long-only. It has $13.5 billion in assets under management (AUM). The fund’s 13F filing showed that it mainly focuses on services, technology, and financial stocks. After analyzing Egerton Capital’s 13F, we found that the fund’s top stocks for the first quarter were Southwest Airlines Co (NYSE:LUV), McGraw Hill Financial Inc (NYSE:MHFI), and Apple Inc. (NASDAQ:AAPL). In this article, we will take a look at each of these top holdings of Egerton Capital.

Apple Inc. (NASDAQ:AAPL), Logo, Big, Sign, Brand, Steel, White

FooTToo /

We track the latest moves of hedge funds as well as monitor their holdings to find actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points between 1999 and 2012, however this 50-stock portfolio also underperformed the market by seven basis points per month. On the other hand, the top 15 small-cap stocks had an average monthly return of 127 basis points per month during the three month holding period that begins two months after the end of each quarter. We have been sharing the stock picks of our small-cap hedge fund strategy since the end of August 2012 and our small-cap strategy has returned over 144% since then, beating the S&P 500 ETF (SPY) by over 84 percentage points over this 2.5+ year period (read the details here).

Let’s first discuss Southwest Airlines Co (NYSE:LUV), which continues to remain the top holding of Egerton Capital. The investor was bullish on Southwest Airlines Co (NYSE:LUV) during the last quarter, raising its position by 31% to 19.38 million shares, worth $858.7 million. Egerton Capital added Southwest Airlines Co (NYSE:LUV) to its portfolio during the fourth quarter of 2014. Southwest Airlines Co (NYSE:LUV), which operates a passenger airline and has a market cap of $24.95 billion, has lost 14.3% year-to-date (YTD). The company serves 94 destinations across the United States and six additional countries, with more than 3,600 flights a day. Southwest Airlines Co (NYSE:LUV) posted very strong financial results for the first quarter of 2015. Excluding certain items, net income for the quarter was $451 million, or $0.66 per diluted share, representing a prominent increase from $126 million, or $0.18 per diluted share, in the same quarter last year. In a statement, Southwest Airlines Co (NYSE:LUV) said that it returned $381 million to its shareholders during the first quarter 2015 financial period, paying $81 million in dividends and repurchasing $300 million in common stock, or 5.1 million shares. Other investors that see value in Southwest Airlines Co (NYSE:LUV) include Cliff Asness’ AQR Capital Management and Israel Englander’s Millennium Management, holding 5.62 million shares and 2.80 million shares respectively, as of the March 31.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!